In praise of secondary cities

Not so long ago, the central question of urban planning was how to revive the downtowns and surrounding neighborhoods of major cities. In the last decade or so, those efforts have succeeded to the point where the central question has become, “where do the people go who are being priced out of these cities?”

It’s worth a moment to understand what shifted during that time.

Across the United States, the downtowns in need of revival had been damaged by misguided federal policies like redlining (a racist policy of not making loans in ethnically-diverse neighborhoods) and urban renewal (massive demolition of historic neighborhoods). By contrast, the revival of these neighborhoods was often a fragmented, small-scale effort that largely happened from the ground up. Cheaper rents and large vacant spaces provided fertile ground for creative and entrepreneurial efforts.

Many of these neighborhoods experienced the same arc. From sleepy and decrepit bargains to lively and gritty destinations, and finally to consumerist caricatures of their former liveliness. Some of these neighborhoods were victims of their own success; rents and purchase prices rose out of reach because it was now much more desirable. For other neighborhoods, rezoning created incentives to demolish those large, vacant spaces (or those small, occupied houses) for an apartment complex or condo tower aimed at more affluent residents.

Among affluent families, the shifting preference from suburbs to cities is glibly described as a ‘change in consumer preference.’ But it is more than this. The shifts are not just on the demand side, but on the supply side as well. During that time, the cities changed as well, becoming more like suburbs – and thus more welcoming to wealthy suburbanites. In turn, the demographic of these cities is coming to resemble affluent suburbs: doctors, lawyers, management consultants, and those in financial services.

At the same time, the people who made these cities interesting and dynamic – the writers and artists, musicians and actors, entrepreneurs and talented young people – are being priced out. Today, many young people who move to a major American city to pursue creative or entrepreneurial ventures require the financial support from their parents.

And yet, people are paying these higher prices because they believe that they need to be in the city in order to pursue these kinds of ventures and meet like-minded people. But is this always true? Or could smaller cities and suburbs also could provide these opportunities?

Almost every unsexy suburb within commuting distance of major cities has the basic raw elements to make for a fascinating and livable place.

In addition to low rents and purchase prices, there is often a critical mass of housing within walking distance of a historic (but largely vacant) downtown, one that evokes the opening sequence of Bob’s Burgers. But even the vacancies can be an opportunity rather than a drawback. These were the same conditions that faced the early next-wave residents of almost-suburban city neighborhoods like Williamsburg, South Boston, or Silver Lake. In each case, it was the vision and drive of the creative and entrepreneurial residents that transformed these buildings from space into an actual community.

Today, these suburbs and mill towns are overlooked by major real estate investors. But again, this can be an opportunity rather than a drawback. Even as contrarian investor Sam Zell recently sold Equity Residential’s suburban portfolio to focus on urban markets, this creates an opportunity to be a contrarian to the contrarian, by taking advantage of the lower prices because these areas are out of favor.

But not all secondary cities are created equal.

Some have geographic advantages of significant parks, protected land, or beautiful views and rivers (like Beacon and Garrison, NY). Others have architectural advantages, with intact neighborhoods of elegant historic houses for less than the price of a Manhattan studio apartment.

Former mill towns have a particular advantage – if it is used thoughtfully.

The vacant or underused factory buildings offer a potential density that might only be found in larger cities. For example, the buildings in the canal district of Lowell, Mass., would not look out of place in Tribeca in New York City. Furthermore, the redevelopment of these spaces generally doesn’t displace anyone (except for pigeons) and, if done thoughtfully, can add mixed-use liveliness that can benefit the entire neighborhood or town. The vast size of the buildings and the relative affordability of the raw space allows developers to devote square footage to, say, independent movie theaters and stages, to provide a lifestyle within walking distance for which residents previously needed to travel out of town.

While these entertainment spaces are critical to the livability of a secondary city, they do not need to be gratuitously large or fancy. In fact, they will likely be better, and more affordable, if they are not.

For example, community groups who try to raise money for a nonprofit movie theater get caught in an endless cycle of grant writing to raise much more money than they actually need to launch. People forget that at its heart, a movie theater is a black box room with a projector. Maybe with beanbag chairs. Rather than trying to compete with commercial chain theaters on technology or fancy seating, their competitive advantage can be intangible – better film programming, or video talks with the director or writer, or events or events (like Rocky Horror Picture Show) that cannot be found elsewhere.

Even buildings that are not historically significant can be re-purposed rather than demolished. Smaller towns that grew by absorbing more contemporary suburbs have examples for how to reuse functional buildings like auto body shops and chain restaurants.

In outlying neighborhoods of Austin and Sedona, some former Pizza Hut franchises have been transformed into independent restaurants. In Greenwich, Connecticut, a former Howard Johnsons was renovated into the sleek, midcentury J-House Hotel. In a rural part of North Andover, Mass., the local music venue was the Red Barn, which was exactly what is sounds like. And in suburban parts of Anchorage, Alaska, pop-up shops take the form of happily-painted garden sheds on trailer hitches, set up in parking lots or roadside which serve as mobile coffee shops or as specialty jerky shacks.

Truly, more Brooklyn than Brooklyn.

In 2006, at the final show of CBGB’s – a moment that for many marked the end of a countercultural era for the East Village – when most people were waxing nostalgic about the revelry, the community, and the closing of an institution, Patti Smith offered an unsentimental coda: “CBGB is a state of mind. Young kids all over the world are going to have their own f—ing clubs. They won’t care about CBGB because they’re going to have the new places, and the new places are always the most important.”

This sort of punk rock/DIY ethos that drove the city’s revival from the 1970s to the 1990s, and this pragmatic, grassroots approach is precisely why the next hot Brooklyn neighborhood might not be in Brooklyn.

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About Jonathan Miller

Jonathan Miller is President and CEO of Miller Samuel Inc., a real estate appraisal and consulting firm he co-founded in 1986. He is a state-certified real estate appraiser in New York and Connecticut, performing court testimony as an expert witness in various local, state and federal courts. He holds the Counselors of Real Estate (CRE) and Certified Relocation Professional (CRP) designations. He is an Appraiser “A” Member of the Real Estate Board of New York and a member of Relocation Appraisers and Consultants, Inc.Learn More...

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